Plug Power Reports $178 Million in Revenue and Raises Its 2026 Guidance. Here's What PLUG Investors Need to Know.

Plug Power (NASDAQ:PLUG) — a popular hydrogen fuel stock — popped after announcing second-quarter earnings on Aug. 10. Investors and analysts alike were impressed by the company’s progress towards profitability. Revenue gains and cost efficiencies helped the company beat estimates for both sales and profits.

Plug Power posted an adjusted second-quarter loss of $0.07 per share. That beat Wall Street’s prediction of an $0.08 per share loss, while also handily outpacing last year’s result of an $0.18 per share loss.

Narrowed losses were helped by a 15% spike in hydrogen fuel sales, which, in turn, was driven by rising demand among the company’s growing installed customer base. Sales overall ticked higher by 2.5% year-over-year to $178.3 million, beating consensus estimates by nearly $10 million.

Analysts were particularly excited by the company’s progress towards profitability, as well as boosted sales growth guidance.

“Plug Power … reported that gross margin neared breakeven territory, marking a hefty improvement from a year ago and the first quarter,” observes Barron’s. “But the big takeaway for Wall Street was Plug Power’s decision to raise its 2026 revenue guidance growth expectation to 15% to 16%, up from the company’s previous 13% to 15% growth view.”

Plug Power’s stock is now nearly 40% higher since 2026. But over the past five years, shares remain more than 90% lower.

Should Plug Power investors trust the positive earnings report? You might be surprised by the answer.

This is the biggest problem with Plug Power stock

The last few quarters have been impressive for Plug Power. Last October, the company announced a new CEO, Jose Luis Crespo, who officially took over this March. Crespo quickly announced several strategic priorities, chief among which was turning Plug Power profitable.

Over the past decade, Plug Power has increased sales by more than 700%. Persistent losses, however, have forced it to dilute shareholders by issuing more stock. Total shares outstanding have also jumped by nearly 700% over the past decade, completely offsetting the company’s revenue gains over that time. Persistent losses, therefore, have been the main drag on shareholder returns, not revenue growth.

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This is why Plug Power’s progress towards profitability has analysts so bullish. Plug Power has had success installing its new Gen Eco hydrogen electrolyzer systems. And a higher installed base is now generating more hydrogen fuel sales, improving operational leverage and margins.

Here’s the problem: hydrogen fuel remains largely uneconomic versus traditional renewable power sources and conventional fossil fuels. Demand forecasts for hydrogen have been consistently lowered due to uncompetitive pricing.

“We forecast the amount of hydrogen produced in 2050 will be 35% lower than we forecast in 2022. Clean hydrogen will see an even bigger decrease of 45%,” one industry forecast warned on Aug. 7. “Like most mainstream forecasters of the energy transition, the high cost of hydrogen and the lack of policy implementation have led us to revise our outlook.”

Plug Power has been impressive in recent quarters. But the company still specializes in a fuel source with limited long-term growth drivers apart from industry experimentation and government subsidies. In other words, Plug Power still operates in an unfriendly market.

Wall Street still expects Plug Power to remain unprofitability in both 2026 and 2027. This will likely trigger additional share dilution. Until the company can prove its ability to sustain positive profit margins, I’m remaining on the sidelines.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.